32 replies to this topic

[Ajijic]

http://money.cnn.com/2012/08/17/news/economy/mexico-oil/index.html?hpt=hp_t3

[Xcalaker]

Nothing new in that article.
Maybe Nieto can get the industry to open up to outsiders.

[rufus]

Pemex will always be Pemex. Not much will change in a government owned oil business as far as management is concerned. But as new deep drilling, lateral drilling and fracturing technology is implimented, old oil fields will suddenly be brought back to life.

I see John Deutch writing in the "Wall Street Journal" says that natural gas from US shale deposits will transform the American economy. That will also happen all around the world where these shale deposits occurr. Natural gas is now dirt cheap.

That said, remember these are the people that five years ago were telling us that we had reach peak oil.

Rufus

[Ajijic]

The positive is there is a lot of oil in the Gulf of Mexico and in the areas of Mexico adjacent to the huge shale deposits in Texas. Plus there has to be reserves of natural gas in shale yet to be discovered as numerous countries now realize.

[Mainecoons]

It is unfortunate that this wonderful country leaves its vital energy supply, oil and electricity, in the hands of organizations that are a toxic combination of incompetent and corrupt government "management" and greedy and equally corrupt labor unions. The result is pretty predictable and sad. CFE and Pemex are screwing the entire country for the benefit of a chosen few.

[rufus]

There are some things in this world that we know stink, but one had better not mention them. Criticism of PEMEX seems to be one of them. When I see all of that gas being flared off in the Mexican oil fields, I have to wonder why and how they can waste all of that gas. About five or six years ago, I read where a company had designed a small cryogenic processing plant that would salvage flared gas. It seems nothing came of it.

Now, that natural gas terminal that was built at Puerto Libertad, Sonora was supposed to be a place to off load cheap natural gas from Bolivia far from the eyes of the EPA. The original thought was to supply the western part of the US with cheap gas from Bolivia. Well Evo Morales and the development of shale deposits in the US put an end to that idea.

US gas is so cheap now that it soon be flowing the other way in that gas duct, from the USA to Mexico.

Strange world isn't it.

Rufus

[AlanMexicali]

It is unfortunate that this wonderful country leaves its vital energy supply, oil and electricity, in the hands of organizations that are a toxic combination of incompetent and corrupt government "management" and greedy and equally corrupt labor unions. The result is pretty predictable and sad. CFE and Pemex are screwing the entire country for the benefit of a chosen few.

If there is a solution to this problem what would it be?

[Mainecoons]

Privatization, this time open, above board and not cronyized.

A tall order here, I know.

[AlanMexicali]

Privatization, this time open, above board and not cronyized.

A tall order here, I know.

i disagree simply because the revenue generated from CFE and Pemex has always been Mexico´s bread and butter. If the initial buy out money is gone from privitizing them they then would have to go after citizens in taxes and fees that as we all know they don´t really care about. The perfect example would be our property taxes would skyrocket. They would agressively collect income taxes and all other taxes instead of the way it is now. Building permits and many other things that cost very little and in some cases are ignored would skyrocket to where the average wage would have to increase or businesses and home owners would be out in the street. As it is now we know how these things are overlooked to keep people in their business and home for very little money.

Why give Carlos Slim and his friends and the Texas Good Old Boys money from every Pemex gallon of gas pumped at the pumps, propane etc. and every watt of electricity used, not to mention all the petrochemicals and tons of virgin plastic sold here?

It might be inefficient but at least it is still generating capital for the general till.

[RVGRINGO]

I agree! The present system in Mexico is a very fair method of taxation. Those who use more petroleum products or electricity will pay more to the government and those who purchase more taxable goods at the included and almost invisible 16% IVA will also pay more into the general fund. That seems very fair to me.

[Mainecoons]

There's nothing that says they can't get revenues from privatized Pemex and CFE. Indeed, freed of paying thousands of people who don't show up for work, executives who take bribes to accept overpriced contracts, and an electric utility that loses 20-25 percent of its product and is falling apart because it can't attract investment, the government would have more money not less.

Slim's phones work, they are much cheaper than lines in the U.S., the internet service is better. You will note that I specifically said privatize sans the cronyism that characterized earlier privatizations.

Perhaps the Brazillian model of Petrobras would represent a way to clean up Pemex and CFE. Only one who hasn't read up on the current situations would believe that it is good for Mexico in either case.

http://eleconomista....emex-deadweight

[bigd]

There's nothing that says they can't get revenues from privatized Pemex and CFE. Indeed, freed of paying thousands of people who don't show up for work, executives who take bribes to accept overpriced contracts, and an electric utility that loses 20-25 percent of its product and is falling apart because it can't attract investment, the government would have more money not less.

Slim's phones work, they are much cheaper than lines in the U.S., the internet service is better. You will note that I specifically said privatize sans the cronyism that characterized earlier privatizations.

Perhaps the Brazillian model of Petrobras would represent a way to clean up Pemex and CFE. Only one who hasn't read up on the current situations would believe that it is good for Mexico in either case.

http://eleconomista....emex-deadweight

I might disagree about Mr Slims phone service. I pay 28.00/month for my phone service and can call anywhere in the US unlimited. Another thing, they even work when it rains.

[cbviajero]

.

Slim's phones work, they are much cheaper than lines in the U.S., the internet service is better.

That's simply not true and we all know how Slim acquired Tel Mex from his buddy Salinas de Gotari.

[AlanMexicali]

I might disagree about Mr Slims phone service. I pay 28.00/month for my phone service and can call anywhere in the US unlimited. Another thing, they even work when it rains.

By all the rules of profit making when one considers the cost of doing business in Mexico compared to the US and Canada Pepsico should only be charging less than a couple of dollars for a large bag of potato or corn chips instead of almost double that and Carlos should be providing services for less than he does, but then gouging people is not uncommon anywhere. International companies make more in underdeveloped countries where they quickly buy up the local competition and set new high prices. I used to like it when Sabritas was Mexican owned and potato and corn chips were half the price here as they were in the US.

[rufus]

Pemex is a unique institution. It not only provides petroleum products to the nation, it is a source of sinecures for political operatives and connected relatives. It is also a cash cow. Gasoline increases in volume as it heats up. That brought into inventory under cool conditions will increase in volumn as it heats up. So when the same amount is taken out of inventory under warm conditions, there is a certain amount left over. The books balance and everything is well and fine, but there is that bonus amount that is available for financing other activities.
Pemex will always be Pemex. Nothing will change because the system works for the right people. I suspect that is the case with all state run enterprises. What will General Motors look like after twenty years of government management?

[Mainecoons]

Like the Volt?

[chartiec]

Mx needs a phased approach to privatizing PEMEX and broadening the tax base in parallel.

[rufus]

Actually, it is not our right to indulge in Mexican political affairs, in fact that can get us into some trouble. Just bite your tongue and shake your head. It is beyond us.

[Viajero-Tiempo]

I believe that someone's political orientation is showing.
I dont think Chevy Volt has anything to do with Mexico.

[Mainecoons]

I believe someone's lack of humor is showing. And while you work on that, you might want to read the last sentence of Rufus's post above.